- Samsung Electronics Co, Ltd (OTC:SSNLF) negotiated with foundry clients over a 20% hike for manufacturing semiconductors to beat multiple macro risks like the Ukraine crisis, lockdown in China, rising interest rates, and inflation, Bloomberg reports.
- The move translates into additional pressure on makers of smartphones, cars, and game consoles to lift the prices consumers pay.
- Contract-based chip prices are likely to rise 15% - 20%, depending upon sophistication.
- Also Read: Samsung Overtook Intel As Top Chip Seller In 2021 Thanks To Automotive, Smartphones
- Chips produced on legacy nodes would face more significant price hikes.
- New pricing will be effective from the second half of this year.
- Taiwan Semiconductor Manufacturing Company Ltd (NYSE:TSM) also recently announced a similar move.
- Semiconductor makers have been trying to improve profitability by shifting more weight to high-end chips, acknowledged a Bloomberg analyst.
- He said that the move was inevitable for Samsung, with costs rising from power and equipment to materials and freight. Some customers may accept higher prices if they get chips earlier than others.
- Samsung was on track to improve the yield on 4-nm nodes and looked to start mass production of 3-nm-based chips within the current quarter.
- Price Action: TSM shares traded higher by 1.03% at $88.59 in the premarket on the last check Friday.
